Crackdown on stolen cellphones targets scores of businesses

Dozens of Chicago businesses have been slapped with hefty fines and cease-and-desist orders for violating an ordinance — triggered by a robbery that targeted Mayor Rahm Emanuel’s son — aimed at drying up the black market for stolen cellphones.

The city’s Department of Business Affairs and Consumer Protection has investigated 331 businesses that sell cellphones and found that 143 of them – 43 percent — were not in compliance with the ordinance that took effect on Oct. 23.

Forty-six of those businesses were operating without the required second-hand dealers license and ordered to stop selling cellphones.

Another 178 businesses were slapped with citations, while 148 received “notices to correct” violations for: improper city license; failure to maintain the required inventory book; neglecting to put the required tracking stickers on cellphones and failing to comply with receipt requirements.

The Chicago Police Department also worked together with Business Affairs and Consumer Protection on a two-day blitz that targeted 44 businesses in four high-crime police districts: Gresham, Ogden, Harrison and Grand Central.

Fourteen businesses were found to be violating the ordinance and 26 citations were issued. During the course of that investigation, police recovered two illegal guns, 156 stolen cellphones, eight stolen tablet computers and 100 packs of contraband cigarettes.

The early show of force — with fines ranging from $1,000-to-$2,000 for each cellphone purchased or offered for sale — is a clear sign that City Hall intends to use its powerful new tool to try and dry up the black market for stolen cellphones.

Last year, 14,493 cellphones were reported lost or stolen in Chicago. Many were muscled away from distracted pedestrians and CTA riders by armed offenders lured by the $600 they stand to make on the resale market.

“Cellphone robberies are a serious threat to public safety and a parent’s peace of mind,” Emanuel, whose son had his cellphone stolen in 2014 down the street from the mayor’s Ravenswood home, was quoted as saying in a news release.

“Enforcement has stepped up and a message is being sent to businesses that they can no longer flip a profit from a stolen phone.”

Police Supt. Eddie Johnson said police now have the “tools we need to put an end to the sale of stolen cell phones by holding retailers accountable.”

“Through continued compliance checks, we will make our streets safer as criminals realize that these stolen devices will not be able to be sold for their cash value,” Johnson was quoted as saying.

Business Affairs and Consumer Protection Cmsr. Rosa Escareno said the ordinance Emanuel championed is already “putting a stop” to businesses “cashing-in on stolen phones and shutting down the pipeline that supports criminals.”

She warned that businesses caught selling phones out of compliance with the new rules would “face the consequences, including fines and closure.”

In September, aldermen did what they could to devalue cellphones stolen and unloaded by street gangs to bankroll their operations.

The ordinance championed by the mayor prohibits the purchase of any cellphone from a minor and bars secondhand stores, kiosks and service providers from purchasing or activating any cellphone until the serial number is cross-checked against a database of stolen phones.

Those same stores now must make their records available for inspection and notify police if someone tries to sell a stolen phone.

The ordinance also tightens the regulatory noose around pawnshops and secondhand dealers that traffic in stolen phones, even though they’re already licensed by the city.

Those changes require retailers with five or more used cellphones to get a secondhand dealers license.

Retailers are further required to slap stickers with the inventory number on used cellphones, keep an inventory of accepted phones, cross-check the database of stolen and lost cellphones and issue a receipt to the buyer.

Fines range from $1,000 to $2,000 for every cellphone purchased or offered for sale in violation of those provisions.

Chris Kennedy, commander of gang investigations for the police department, has assured aldermen that the ordinance “really does empower the beat officer.”

“That officer has the ability to walk in and take a look. If these phones aren’t tagged. If there’s not a log maintained. If they haven’t followed a myriad of things that this now mandates, then the fine is significant,” Kennedy told aldermen last summer.

“With those types of crimes, the challenge is proof,” he said. “If we walk in and see there’s stolen phones there and they fail to work within this law, it really does move the needle to show that they had knowledge.”